AWS alerts customers when they have low cloud utilization — costing the vendor $500M a year

Dive Brief:

Amazon Web Services has given up "hundreds of million of dollars" a year as part of its customer focus and attention toward ensuring products are effectively used, said Andy Jassy, CEO of AWS, speaking Monday at the Gartner Symposium/ITxpo in Orlando. AWS will assess how customers are using its platform as part of its "trust advisor" program.
The company checks for customers' low or idle cloud utilization, and "if they do, we'll send out a note saying 'hey, maybe you want to stop spending money with us, and you can resume spending money when you need it,'" said Jassy.
AWS has sent a few million of these notifications over the last year, leading to an annualized customer savings of $500 million a year, according to Jassy. "We don't want to make money from customers unless they're getting value," Jassy said.

Dive Insight:

Most businesses emphasize a commitment to customers, but in many cases it is difficult to prove outside of word of mouth. But AWS dominates the cloud market, proving its approach to customers and the cloud helps maintain long-term commitment and overall customer satisfaction.

AWS' hold on the market is undeniable. One of the foundational vendors for modern business infrastructure architecture, the company holds 44% of the IaaS market. However, Gartner expects AWS to face "growth erosion" with the steady year-over-year revenue growth of its competitors. More companies are also turning to multiple providers rather than sticking with one IaaS vendor.

No matter how large the company, leading vendors can still face market disruption. That's one of the reasons AWS relies on the customer feedback loop, according to Jassy.

While "90% of what we build is driven by what customers tell us matters to them, the other 10% is listening to customers really carefully about what they're trying to solve," said Jassy. Even if a customer can't articulate what features they are looking for, AWS tries to read between the lines and "invent on their behalf."

All major IaaS providers are working to innovate and create in-demand products, but AWS' pace of innovation often outstrips competitors. The company launched 1,000 services in 2016, and 1,250 in 2017. While some vendors are offering per minute billing, AWS now allows customers to pay per second.

Though its rapid pace of product roll-outs can cause some customer confusion, and potentially frustration, companies don't often turn away from the AWS product portfolio.